$114m IMF bailout will go into BoG reserves - Seth Terkper
- By: Isaac Essel | Myjoyonline
- Apr 8, 2015
- 2 min read
The expected initial tranche of $114 million from the International Monetary Fund (IMF) bailout will be used to shore up Bank of Ghana’s declining reserves, Finance Minister Seth has disclosed.
The Board of IMF Friday approved a bailout programme for Ghana, which Ghana is expected to benefit from a total 914 million dollars over the next three years.
Speaking to Joy News hours after the approval, Mr. Terkper indicated that the country’s balance of payment support was not strong enough, needing an urgent attention.
“[Funds from the IMF] will go to the central bank immediately to support the reserves which has been dwindling on account of the fall in gold and cocoa prices – cocoa recovering now – and crude oil prices,” he stated.
The fall in these commodities, he said, has accounted for the falling value of the cedi against international currencies, especially the dollar.
Mr. Terkper was hopeful Ghana’s development partners will come along to support the budget having subjected itself to the IMF programme.
“Government expects that the programme will boost grant disbursements from development partners, improve macroeconomic stability, help support the credibility of Government’s policy and boost investor confidence in the economy,” the Minister said in a statement today.
Meanwhile, he has discounted claims of wage freeze and retrenchment due to the programme.
Ghana has for a long time been implementing a net freeze policy, the Finance Minister pointed out.
There is therefore no need to raise the anxiety of public servants because the issue of wage bill was discussed at the Ho Forum with a post-Ho Forum in the offing, he told Joy News.
Furthermore, he stated, government has managed to reduce the core wage bill to tax revenue from 63% to about 50% without massive retrenchment, which he said was done through consensus building with labour with emphasis on productivity.
He emphasised that Ghana went into the negotiation with the IMF with home grown policies which were bought into by the programme, and asked Ghanaians to expect the policies being rolled out in the next few months.
Asked about government's commitment to keep to the budget next year, which is an election year, he stressed that in 2012, which was also an election year, government expenditure on capital did not exceed the budget, adding that it is not prudent to overspend because of elections.
However, in 2012 the budget exceeded in three areas including subsidies and single spine payment, he conceded.
Source: Myjoyonline.com
By: Isaac Essel
